Tuesday, February 28, 2006

sez Washington Post."If you want to be in the latest trends, you have to be in India," said Dutt Kalluri, who heads data warehousing and business intelligence at the information-technology division of Larsen & Toubro Ltd., India's largest construction and engineering company. "Technology development happens in India. Technology consumption happens in the U.S.

Now I know, in the '80s we were all worried about Japan taking over, Rising Sun style, and that didn't exactly happen. Is it really different now with India and China, two superpowers, each much bigger in size than the US?It feels different, but I don't know.

and will not be able to support spending increases, causing state appropriations for higher education to suffer.This according to a new report by the National Center for Public Policy and Higher Education. Among the factors: Medicaid costs, less federal help, and a loss of state sales tax receipts to Internet commerce."For most states, it is difficult to see a future for higher education that recreates the prosperity of the late 1990s," the analysis concludes. "Colleges and universities -- and the students who enroll in them -- are more likely to face continued financial strain."

The late 1990s? When tuition rose by 25% (as opposed to 57% in the early '00s)? That was prosperity? Oh.

The world's largest retailer also said it would expand its cheapest health insurance option, an $11-a-month plan that has been offered in selected areas. The "value plan," which costs about $20 for families and allows three doctor visits and three prescriptions before a $1,000 deductible kicks in, will be offered to half of the company's employees, Wal-Mart said....

The company said the number of employees covered by its health plans increased slightly last year to 46% — below the national average of 60%. It said almost one-third of its workers get health insurance elsewhere, which critics say is evidence that the retailer relies on state programs and other companies to cover its workers.

Sunday, February 26, 2006

A new survey shows that median incomes fell for households under 45, even as they rose for older ones, between 2001 and 2004. Income fell 8 percent, adjusted for inflation, for those under 35 and 9 percent for those aged 35 to 44. The numbers add new weight to longstanding concerns about whether younger generations of Americans will achieve living standards that are better - or at least equal to - those of their parents.

UPDATE: Krugman sez: What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.

...Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.

So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that.A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," (PDF) gives the details.

Washington Post weighs in: Phew, talk about a book you probably won't see on any critic's summer beach reading list. Apparently "Life's a Drag and There's Nothing You Can Do About It" was already taken.

Friday, February 24, 2006

Books with sales ranks between 1 and 10,000 are re-ranked every hour. The rank depends both on how many books sold the previous hour relative to all the other books on Amazon, plus the recent sales trajectory. A book that holds steady in this range is usually considered commercially viable by trade publishers, [whew!] and means substantial income if you're self-publishing books. Since ranks are relative and overall book sales vary with the time of year, there is no exact formula for describing a sales rate. Books with a steady sales rank near 10,000 are averaging sales of more than one copy a day. Around sales rank of 1,000, the sales rate approaches ten copies a day. Keep in mind that some of these ranks are occupied by books that sold many thousands of copies on Amazon during their day in the sun, and hold onto a good sales rank for years because that initial surge of sales keeps their "average" above that of most other books. Books with steady sales ranks below 1,000 are selling very well, topping several dozen copies a day as you approach 100. I don't have any hard data on the top 100 books, but I'm sure it puts a smile on the face of any trade publisher to have a book selling that well, independent of the season and the competition.

Tonight on the Daily Show, Jon Stewart introduced the concept of generational equity to his loyal viewers.(approximate transcript, by me)

The cost of the Iraq war so far ? $2,083 per taxpayer. I know what you're thinking--I could have adopted several Third World children with that money. Or spent it on an eight-ball and a night with a fancy hooker.But hey, that's not money out of your pocket. We have deficit spending! Borrowing! Don't think of it as $2000 you don't have. Think of it as TWO HUNDRED THOUSAND DOLLARS your GRANDCHILDREN don't have [cut to pic of adorable grandkids]. And seriously! F*ck them! They think you smell like ass!!!!!

On the nature of job market change.As the friend who emailed this to me says:

This article was written by an editor of the WallStreet Journal and a member of the Reaganadministration. Not exactly a liberal zapatista ...

Unemployment benefits were intended to help people over the down time in the cycle when workers were laid off. Today the unemployment is permanent, as entire occupations and industries are wiped out by labor arbitrage as corporations replace their American employees with foreign ones.

Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%. There are now hundreds of thousands of Americans who will never recover their investment in their university education.

He calls it " a jobs depression."

UPDATE: Here is another take on the same subject: a huge report just came out on offshoring.

The average debt for a college graduate has soared 50% in the past decade, after inflation, according to the Project on Student Debt, a non-profit advocacy group. Just as record-low mortgage rates have eased the impact of soaring home prices, low student-loan rates have let borrowers cut their payments, softening the impact of rising debt.

"Low interest rates have served as a sort of amnesty for graduates with debt," says Robert Shireman, founder of the Project on Student Debt. "We haven't seen what the real impact is of much higher levels of borrowing."

Now, with interest rates rising, that amnesty is about to end. The 6.8% fixed rate for Stafford loans, the most popular student loan, will replace a variable rate that used to be adjusted every July 1, based on Treasury bills. Under the old system, borrowers could consolidate their loans when rates were low. And they could lock in that low rate for the life of their loans.

I swear, we have to be coming close to a tipping point on the national issue of debt and accountability--for the lenders and the government. Credit cards, student loans, bankruptcy laws--the model we have isn't working.

PS. If you like really long comment threads, here's one on Daily Kos on this story.

Young Voter Strategies, a project of George Washington University, is celebrating the 35th anniversary of the voting age being lowered from 21 to 18, in March 2006, by funding several new projects designed to engage young people in the 2006 & 2008 elections. More news soon.

They write:As I'm sure you know, in 2004 young voterturnout jumped 11 percentage points over 2000, nearly three times theincrease among the overall electorate. More than 20 million 18-29 year oldsvoted in 2004-an increase of 4.3 million.

Tuesday, February 21, 2006

The globalization of increasingly high-skilled jobs is one of the main big-picture job issues affecting Generation Debt. Here's an interesting exchange between an Indian entrepreneur and a high-tech union organizer, Marcus Courtney of Washtech, who I quote in my book.

Soota: Globalization and technology enable every nation to sell globally and source globally. This is not without transitional pain. The pain is equal for a small retailer in India edged out by a global giant and an American whose programming job may go to Bangalore.

But no nation is as well-equipped to take advantage of the emergent phenomena as the United States, because it is a champion of free markets and has a large immigrant workforce with global connections. And Americans are by nature more adaptive, a strength that provides timeless resilience.

Courtney: But there are consequences for that shift. The drivers of the global economy are focused on lowering wages and benefits of U.S. employees. Our high-tech industry has seen little job growth in the more than four years since the recession. If outsourcing is so great, why aren't more jobs being created?

Monday, February 20, 2006

I spoke with Kamenetz at Salon's New York office about some of the psychological motivations behind consumer spending, the changing American workplace, the future of student loans and whether now is really such a terrible time to be young.

Update: there is a really long thread of letters/comments, which is always exciting to see, and many letter-writers seem to "get it."

Friday, February 17, 2006

It will be a business-sponsored nonprofit: New Delhi, Feb 16 : Metal and mining giant Vedanta Resources today announced plans to set up a multi-disciplinary university in India, with an initial endowment of one billion dollars, which is likely to start by 2008.

The four-billion-dollar group chairman Anil Agarwal, who apprised Prime Minister Manmohan Singh of the project yesterday, said the company planned to develop the university at par with leading global institutes like Harvard, Stanford and Oxford.

Thursday, February 16, 2006

I am devouring the book Confessions of an Economic Hit Man, which an economist emailed me about last week.It's about debt as a method of imperial expansion and enslavement on a global scale. Kind of like Syriana, but broader.

Great crowds in New Haven, both at the Master's Tea and at Labyrinth Bookstore, which I recommend as an excellent addition to the city's bookstore scene.

Best audience question: Do you think the gradual divestment in higher education over the last generation or so comes more from the ascendant conservative view of education as primarily a personal investment (vs. a public good) or from the growing political clout of the AARP?

Wednesday, February 15, 2006

See it here:The issue of excessive student debt demands a federal solution, in cooperation with colleges, to hold down costs for students. The alternative is to give a monopolistic lending industry with its own narrow profit motives control over our nation's competitiveness and our children's futures.

UPDATE: In case you are interested, here is the footnoted version I presented to CSM's editors:

If they do manage to graduate, it means putting off buying a house or starting a family. It makes saving difficult, so a car repair or an illness lands them in credit card debt. It stops people from taking entrepreneurial risks, going to graduate school, working in low-paid social service professions, or moving to a city with better job opportunities but a higher cost of living.In short, debt neutralizes many of the positive effects of education.

Yes, college is still a good deal on average for those who graduate, even with the debt. But saddling young people with these obligations is a bad deal for our country as a whole. A phenomenon called debt aversion means low-income and minority students are less comfortable with borrowing.

As our economy faces ever-more challenges from developing superpowers, we will need all hands on deck. We can't afford to lose 2 million college-qualified high school graduates by the end of the decade, as we are on track to, because they can't afford to go on to college.

The good news is that the growth of student loans-and the simultaneous growth of lenders' profits--are finally edging into public consciousness.Both the Department of Education and the Republican leadership in Congress tried to spin the recent budget reconciliation bill, which cut $12 billion from the student aid program, as achieving its savings by cutting subsidies to banks like Sallie Mae. But local newspapers from Washington State to North Carolina printed the truth: most of the savings taken out of the student loan program come from borrowers. That means higher interest payments and fees for students and parents.

Last September, Secretary of Education Margaret Spellings announced a major, blue-ribbon Commission on the Future of Higher Education. The commission is in a public comments period,

and the student Public Interest Research Groups have begun a nationwide grassroots campaign to get these experts to acknowledge growing student debt as a necessary target of policy change. By April, they want to collect 10,000 comments from students on the impact of their debt. You can see entries from their "Student Debt Yearbook" online at Studentdebtalert.org. "We are the generation of the future," writes Amanda, a graphic design major atPortland State University who will owe $30,000. "We need to be able to start fresh once we are done with our education so we are able to put something back into our community rather than worrying about paying off our outrageous debt."

The issue of excessive student debt demands a federal solution, in cooperation with colleges, to hold down costs for students. The alternative is to give a monopolistic lending industry with its own narrow profit motives control over our nation's competitiveness and our children's futures.

Tuesday, February 14, 2006

I thought I'd post some excerpts from emails I've been getting in reaction to the launch of Generation Debt. I am thinking about holding a contest for the Voice column where people write in to tell their own stories of living in Generation Debt and the things they've been doing to get by.These snippets are posted anonymously, but let me know if you'd like yours taken off the blog.I owe the government a few thousand in taxes, Sallie Mae 20K, and I just get by paying the rent, and live a modest life as far as luxury goes. Your book has made me realize that since Reagan, and especially in recent years, the government has really changed the laws, interest rates, etc. to favor the rich, and (pardon me), fuck the poor... I got so upset reading Gen Debt (a lot of my fellow grads have plenty of money, and have started families...it makes me feel so f*!!*ked up!). I've chosen to live in NYC to pursue the arts, and to escape the bland life of suburbia (where my family resides in NJ). I thought that the reason I was relatively poor was my fault; but really, I've worked hard, just in professions that don't pay.As a young person with great trepidation for my future career / financial situation, your book made me realize that I'm not alone in my seemingly counterintuitive youthful pessimism. I thank you for it.

as a young person in nyc who has a good job but still can't afford to buy an apartment, i fit squarely in the demographic you write about... i can't really afford to buy, but i recently made peace with the fact that for young people these days, the only way to make it economically is through major sacrifice. i was trying to not get down about all that while walking around in the rain when i found...you talking about the same problems i was thinking about... just hearing someone speaking to those issues did indeed make my day.

As a student in my last year... your talk is very relevant to my life and I thank you for helping me be aware of the paths I am currently and will have to take in the future.

It has also been my argument that people in US live with the money that they optimistically think they are going to make in the next 20 years, and they spend all of it today. I can't believe that even myself have a fat credit card balance, and even though I make good money, the monster keeps growing. Young people don't deserve that headache, and I thank you so much for fighting for them.

Thursday, February 09, 2006

Kamenetz ends Generation Debt with some stern prescriptions for her readers. Parents need to talk seriously with their children about the costs of education and retirement and place some economic responsibility on their children at an earlier age. Young people need to begin planning their financial future now , by consolidating debt, saving, and working toward a career. We all need to advocate for better working conditions for the contingent laborers that have become a mainstay of the new workforce. And we need to demand that the government provide better financing for higher education. This call to arms is not a self-pitying complaint, but the product, on Kamenetz's part, of an open mind and real courage.

Wednesday, February 08, 2006

From Slate: "This week, the White House released its 2007 federal budget, which projected a shortfall of $423 billion for the current fiscal year. The good news: Budgeters predict diminishing deficits in years ahead, even while accounting for extending the Bush tax cuts. The bad news: For those forecasts to come true, Iraq will have to turn into Canada next year, Afghanistan into Sweden, and Congress into an order of mendicant monks.

If we deficit hawks have failed to generate enough alarm to motivate action, it may be because our metaphors have gotten stale. Running a deficit isn't so much like shooting yourself in the foot, which hurts immediately. It's more like smoking, drinking to excess, and not exercising. It will in fact kill you—just not tomorrow."

I am in a beautiful Seattle hotel room with a view of the Public Library across the street, getting ready for my speech tomorrow night at Town Hall. Here are some notes for the opening. Comments welcome...

My book is called Generation Debt: Why Now is a Terrible Time to be Young. I didn't actually choose the subtitle of the book; it was meant to be controversial, and sure enough, people have come out swinging right at it from both sides. On the one hand (shaking my finger): Stop whining. It is always a wonderful time to be young. You are healthy, and strong, and you have your health. Get some perspective, for chrissakes!On the other hand: Stop whining. It is always a terrible time to be young. Why I walked uphill to school both ways five miles in the snow. Get some perspective, for chrissakes!

And both of these criticisms, though they are contradictory, I will concede do have some merit. But when I talk about the first part of the title, why I call my generation Generation Debt, I hope that you will become a little concerned about what is actually different for us now, at this time in history.

First, Generation Debt refers to the student loan debt that we incur on the way through college. This debt is now at a level unheard of in American history, and unique throughout the world. Two thirds of us are borrowing an average of $20,000 in order to get a BA.

Second, Generation Debt refers to the credit card debt that we rack up in the years during and immediately after college. Again, the actual legal possibility of incurring large consumer debts while still young and financially dependent is unique to this American generation, and unique throughout the world. Seven out of 10 25-34 year olds are carrying an average of $4,088 in credit card debt. The sheer ability to owe this much was previously available perhaps only to rakish young princes, with gambling habits.

And finally, Generation Debt refers to the politically uncomfortable subject of federal deficits and unfunded liabilities: an $8 trillion national debt, and a $53 trillion long-term shortfall, by some calculations, in Social Security and Medicare. And this topic is uncomfortable because it has to do with my generation living out the consequences of earlier generations' decisions to borrow an awful lot of money and then um, kinda run out and stick us with the check.

So I'll leave this uncomfortable topic for last, and first let's talk about college.

Thanks to Bob Shireman and Edie Irons of the Project on Student Debt for a great event at the UC Berkeley School of Journalism last night, and thanks to Analog Books of Berkeley too! In a highlight, Nancy Coolidge, who coordinates financial aid for the whole UC system, spoke about her success in getting 80 percent of Berkeley students to consolidate their loans last spring to lock in low rates, and the importance of spreading the word far and wide before this July 1--this may be your last chance to get a low, fixed rate.

There definitely need to be better channels to get information out about negotiating the financial aid system *before* people take on debt. I am thinking about going around to high schools now as well. Knowledge truly is power.

Friday, February 03, 2006

These guys put out a Craigslist ad for a mattress hung from their ceiling-$35 a month--and several starving 20somethings responded, including one young woman who spent the previous night on the A-train.

We thought about doing the same thing in our apartment, with a hammock on the balcony.

Wednesday, February 01, 2006

Thanks to the women of Marymount College for a great first book event. Leave a comment if you visit the blog! And if you want to know more about how to get involved, or have any other questions, you can send me a message here too.Anya

The night before the book comes out, we have this piece of inspiration:

WASHINGTON, D.C. - By a vote of 216 to 214, the U.S. House of Representatives this afternoon narrowly approved a Republican-backed bill that cuts $39 billion out of critical health, education, and other services for American families, including a $12 billion cut to the federal student aid programs, in order to finance multi-billion-dollar tax breaks for the wealthy. Not a single Democrat voted in favor of the bill.When coupled with those tax breaks, today's legislation - which Republicans misleadingly claimed was meant to help reduce the budget deficit - will actually increase the deficit."Congress has just enacted the largest raid on student aid in history in order to give more money to the wealthy, even while millions of American families are struggling to afford the rising cost of college," said Rep. George Miller, the senior Democrat on the House education committee. Miller led the fight against the cuts to student aid programs.

It's important to note: 13 Republicans crossed the aisle to vote against this bill. The tireless and intrepidstudent advocates came very very close. Meaning this fight is winnable.